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Monday, September 20, 2010

Affidavit problem stalls GMAC foreclosures

Affidavit problem stalls GMAC foreclosures

Thousands of home foreclosure cases in Florida and nationwide might have been stalled by the sworn testimony of one GMAC Mortgage employee.
Jeffrey Stephan, a GMAC foreclosure team leader, admitted under oath last December that he signed tens of thousands of affidavits verifying mortgage note ownership and amounts, even though he never saw original documents in those cases, according to court documents.
Stephan and GMAC have described the process of signing affidavits as a normal and expected routine that the company engaged in.
On Monday, several national media outlets incorrectly reported that GMAC had announced a blanket moratorium on residential foreclosures. The company denied that in a statement.
In fact, about three months ago, GMAC, now a part of Ally Bank, halted evictions and final sales in foreclosure cases in 23 states, including Florida.
The company acknowledged in a statement Monday that the evictions – not foreclosures – were halted because of a problem with affidavits.
GMAC Mortgage spokesman James Olecki acknowledged the following problems with the affidavits:

  • May have been executed without direct personal knowledge of all of the information stated in the affidavit.
  • In a number of cases, the affidavit was not signed in the physical presence of a notary public.

Olecki, who did not specifically identify Stephan as the person signing affidavits, said whoever signed them relied on the personal knowledge and information of other GMAC Mortgage personnel, and was known to the notary.
Olecki also said the facts of the affidavits are correct, and that GMAC would be working to clear up any problems.
Stephan testified in a deposition that he signed 10,000 affidavits a month.
In an e-mailed response to a request for comment, GMAC said Stephan still works for the company, but he was not available for comment. Efforts to reach his attorney, Alejandra Arroyave of Coral Gables, were not immediately successful.
The problem with affidavits may be a factor in state investigations of foreclosure law firms by Attorney General Bill McCollum.
One of the firms under investigation, Tampa-based Florida Default Law Group, recently told a Palm Beach County circuit judge that information on an affidavit it filed in a foreclosure case may not have been verified.
Florida Default attorney Jeff Gano said in a Sept. 7 notice that it would be filing a new affidavit in the Palm Beach County case, which was filed by another lender, Bank of New York Mellon Trust as successor to JPMorgan Chase Bank.
Meanwhile, U.S. Rep. Alan Grayson, D-Orlando, has called on the Florida Supreme Court to suspend all foreclosure cases filed by the top four foreclosure firms in the state until the attorney general’s investigation is complete.
On Tuesday, Grayson released a letter he wrote to Chief Justice Charles Canady, in which he mentioned a Jacksonville foreclosure case where one of the firms under investigation, Shapiro & Fishman, was found to have committed fraud on the court by filing false documents about who owned a mortgage note.
“Taking someone’s home should not be done lightly,” Grayson wrote. “And it should certainly be done in accordance with the law.”

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